Struggling to make it

The transition to Business products required big expenses. This
coupled with lagging game sales, led to zero profits for Infocom in
1984 (from $1.6 million the year before).

By September of 1985, Infocom was plummeting. The lack of income
finally led to layoffs to reduce operating costs. Three rounds of
layoffs reduced the number of employees to 40 from more than a 100.

Even in 1985, many employees had hopes that the company would succeed.
"It was clear that we had problems," said Ilson. "It was not clear
was we weren't going to surmount them." To make their financial
situation even worse, in 1985 the Bank of Boston cut back on the
credit line of every high-tech company in which they had invested,
including Infocom.

Infocom started looking for a Buyer. The Board believed that
because the company had such a big debt load, the only viable buyers
were computer game companies with money to spend. In February of
1986, it was announced that the computer gaming company Activision
would purchase Infocom for $7.5 million. (Although much of the
settlement price was in Activision common stock and may have had a
different value by the final payment on June 13, 1986).

Infocom employees were, on the whole, pleased with the news.
According to one employee, "At the time, it [the merger] was ideal.
We needed it to survive." [Tim Anderson, Interview] Activision also
had a very similar corporate culture to Infocom's. Additionally, the
CEO of Activision at the time, Jim Levy, was a true fan of Infocom
games. Infocom had a surprise "InfoWedding" with Levy and Berez to
commemorate the merger. Levy happily played along as "Rabbi" Galley
pronounced Activision and Infocom, "Corporation and Subsidiary." "The
way Levy handled [the wedding] was better than any speech he could
have given," said Meretzky.